In today’s briefing:
- Ecopro Materials KOSPI 200 Fast Entry Assessment: With K Car as the Outgoing Constituent
- A Potential Fight for Management Rights of Socar Between Lee Jae-Woong and Lotte Rental
- DS Dansuk IPO Valuation Analysis
Ecopro Materials KOSPI 200 Fast Entry Assessment: With K Car as the Outgoing Constituent
- The fast entry screening spans from November 17th to December 7th. Given its current market cap, we should anticipate the potential success of fast entry.
- The implementation date will coincide with the effective day of the December rebalancing, which is December 15th. There are precedents of successfully achieving fast entry with such a tight schedule.
- The setup will be challenging due to the short selling ban. Nevertheless, with an existing position, there may be value in a market timing approach.
A Potential Fight for Management Rights of Socar Between Lee Jae-Woong and Lotte Rental
- It was announced that founder of Socar Lee Jae-Woong purchased 336,000 additional shares of Socar. This signals a potential M&A fight for Socar between Lee Jae-Woong/related parties and Lotte Rental.
- Founder Lee Jae-Woong and related parties currently own 37.8% stake in Socar versus Lotte Rental which has 32.9% stake.
- Socar is currently trading at more attractive valuations and we like the company’s aggressive strategy to raise profitability.
DS Dansuk IPO Valuation Analysis
- Our base case valuation of DS Dansuk is 113,948 won per share which is 28% higher than the high end of the IPO price range (89,000 won).
- We estimate bio energy to account for 64.7% of total sales, followed by battery recycle (21.5%), plastic recycle (6.7%), and others (7.1%) in 2023.
- DS Dansuk is an eco-friendly company with three core businesses including bio energy, battery recycling, and plastic recycling.
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